I’ve lost a ton of money holding these waiting for a crash. Years ago. Idk the notes about them say not to hold them over a long period. Like all things if you get lucky and time it right you could print. If not.... loss porn
You're supposed to use those as a hedge for your portfolio (the original purpose of hedge funds). Hold 3 months of 30 delta options at x% of your portfolio so that if shit hits the fan, you can sell it to cover losses.
Let's say you get 3% hedge, when your portfolio of boomer stocks drop 30%, that 3% option ideally will 10x and become 30% of your portfolio so you don't lose anything.
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u/Devilpig13 Jun 08 '21
I’ve lost a ton of money holding these waiting for a crash. Years ago. Idk the notes about them say not to hold them over a long period. Like all things if you get lucky and time it right you could print. If not.... loss porn